Earlier, the Reserve Bank of India (RBI) came out with a special rupee account for bilateral trade between the rupee and any currencies other than the US dollar. Gazprombank is facing only regional sanctions, but not exclusively
Nominated national, or
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UCO Bank and Gazprombank did not immediately comment on the matter.
The RBI on July 11 allowed invoicing and payments in rupees for international trade, potentially facilitating greater bilateral trade with Russia, which is facing a wide range of Western sanctions and standard cross-border payment platforms. Almost cut off.
The move paved the way for settlement of payments in rupees for trade between Indian and Russian, giving greater flexibility in the conduct of Vostro accounts opened by Russian banks with Indian banks. A Vostro account is one that a foreign bank opens with a indian bank In domestic currency ie Rs.
A ‘Special’ tag for Rupee Vostro account allows utilization of surplus balances in Government of India securities.
Experts in the sector believe that the UCO, which has little exposure to the US market, is a suitable candidate for bilateral trade payments between India and Russia as it will not affect its business due to the US sanction on the Russian bank.
“Big banks with international operations should avoid this commercial bet as it could risk economic sanctions,” said one banker.
before, uco It was also the primary payment settlement bank for India-Iran trade relations when Iran was under US sanctions. The special payment mechanism for importing crude from Iran provided the state-owned lender with a fair share of interest-free floating funds, which helped it reduce the cost of funds.